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Arizona Revocable Living Trust Form: What You Need to Know
Planning what will happen to your assets after you pass away is essential. And one way to do this is by setting up a revocable living trust. But if you live in Arizona, you'll need to use a specific form for your trust.
What is a Revocable Living Trust?
A revocable living trust is a legal document that allows you to specify how your assets will be managed and distributed after your death. You can name yourself the trustee, which gives you control over the trust during your lifetime. You can also name a successor trustee to take over after you die or if you become incapacitated.
Revocable Living Trust vs. Irrevocable Living Trust
There are two types of living trusts: revocable and irrevocable. But what's the difference? A revocable trust can be changed or dissolved at any time, while an irrevocable trust cannot. Although both types of trusts can help you maintain control of assets, preserve privacy, and avoids probate, they also have some drawbacks. Here's a more detailed look:
Advantages of a Revocable Living Trust
There are several advantages to setting up a revocable living trust, including:
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You maintain control over the assets in the trust.
The terms of the trust can be changed at any time.
The trust does not have to be filed with the court, which means it can be kept private.
Assets in the trust avoid probate.
Disadvantages of a Revocable Living Trust
There are also some disadvantages to consider, including:
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The assets in the trust are still subject to estate taxes.
Creditors can still go after the assets in the trust.
The trust does not protect assets from Medicaid spend-down.
Disadvantages of an Irrevocable Living Trust
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Limited Flexibility: Once an irrevocable trust is created, the terms cannot be changed. This can be a problem, especially if you want to change your mind about how you want the assets distributed.
At "mercy" of your trustee: If you name someone else as the trustee of your irrevocable trust, you lose control over the assets. This person will have complete discretion over managing and distributing your assets, which may be outside your wishes.
Potential complications: Irrevocable trusts can be complicated to set up and administer. If done incorrectly, the trust could be invalidated.
Do You Need a Living Trust in Arizona
Not everyone requires a living trust in Arizona, but you may consider it to utilize its many benefits. For one, it gives you the power to control how and when your assets will be distributed to the people of your choice. Again, it allows you to avoid the hectic probate process with an additional guarantee of privacy.
But still, Arizona is one of the states that has adopted the Uniform Probate Code. This means the probate process here is simpler, especially for small estates. Your inheritors can easily avoid the probate process and opt for the simplified probate process if there is no executor or a personal representative. This can also work if you have personal property with a total value (non real estate) not exceeding $75,000.
Other shortcuts you can use include transfer-on-death deed and summary administrative procedure. Nevertheless, be sure to understand them in detail before you opt to skip creating a living trust.
Another question you are probably asking is if a living trust can reduce estate tax in Arizona. It will not because the federal estate tax levies apply to estates amounting to $12.06 million ($24.12 million for a couple). To reduce estate tax, you should use a complicated trust like AB.
How to Set Up a Revocable Living Trust in Arizona
To set up a revocable living trust in Arizona, you'll need to use the state's specific form. This form, also known as an "Arizona Declaration of Trust," can be found on the Arizona Secretary of State's website.
The settlor (the person creating the form) must sign the form, which must be notarized. Once the form is complete, you'll need to fund the trust by transferring ownership of your assets into it.
You can name yourself as the trustee of your trust, which gives you control over how the assets are managed during your lifetime. You can also name a successor trustee to take over after you die or if you become incapacitated.
When the time comes to create your living trust in Arizona, Forms.legal is the place to head to for assistance. Create your Arizona revocable living trust now.